While many think of April as the tax season deadline, the month also offers a great opportunity for Oregon households to talk to their children about financial responsibility. April is National Financial Literacy Month, recognized by the U.S. Congress as a way to highlight the importance of maintaining healthy financial habits. 
So, what does "financial literacy" mean? A few years back the President’s Advisory Council on Financial Literacy gave this definition: “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being."  Research shows that America’s youth lacks a solid foundation when it comes to properly managing money. The National Financial Educators Council’s test of thousands of 15-18 year olds across the country revealed that only 60% of students had the ability to earn, save and grow their money; in Oregon the results were a little higher, around 65%. 
A national movement is underway to incorporate financial literacy into school systems, but so far just 17 states require a course in personal finance to graduate high school.   While Oregon is not one of these states, it does have financial literacy incorporated into the state curriculum standards. 
To help supplement the financial lessons students are learning in class, there are lots of ways parents can teach their children money management lessons at home:
Wants vs. Needs: It can be tough to explain to children the difference between a want and a need, but it's essential for good financial literacy. Parents can talk about how people need food to survive, but children probably don't need a new video game to do the same. To explain the difference between a want verses a need, parents can go over their own monthly expenses with children and show them how the money left over is available to buy items they want.  
Budgeting: Talk to kids about the family's monthly budget. Showing children the household bills helps them understand the concept of budgeting, where the money goes and why. Parents can give kids hands-on budget experience by letting them control the family's entertainment budget for a month. Tell them once the budgeted amount is used up, the family will have to stay home and eat frozen pizza instead of going out to the movies! 
Goal Setting: Encouraging students to set financial goals will help them learn patience and become better financial planners. Have children create a wish list of things or activities they want to save for, and then build a budget and plan to reach the amount needed. Parents can work with their children to calculate how much to save each week and set a target date to make the purchase. For younger kids, try using a clear jar instead of a piggy bank to  help children visually watch their money add up, getting closer to their savings goal. 
Allowance: Children can pay for items on their wish list by saving money from their allowance. While there are mixed opinions on whether or not to give children an allowance, some say it's a good technique for teaching students the basics of earning, saving, and spending. One option for providing an allowance is based on a chore reward system, with various pay rates for completing daily or weekly chores, depending on the family. 
Grocery Shopping: Parents can turn a trip to the grocery store into a teachable moment. Illustrate basic money management habits by starting with a shopping list and showing children how preparation can lead to savings. Make sure kids bring a calculator, notepad, and pencil with them, so they can calculate the prices of products and the total bill. Explain how coupons work and how comparing the price differences between name brands and generic products can add up to big savings. 
Bank On It: A visit to the bank or ATM is a good way to show students where money comes from. Children can learn that banks don't just hand out money, it's also place for money to be stored and a place where people go to take out loans. Many banks allow parents to open a savings account in their child's name. Parents can demonstrate how to deposit money in the account, and the added responsibility of maintaining the account helps children learn important life skills. Even though parents are in the habit of using debit and credit cards to make purchases, adults can use cash for transactions, which helps children witness money being exchanged for goods and services. 
Of course, the best financial literacy learning experiences for children happen every day from their primary role models - their parents. Parents can demonstrate a positive influence on a child's financial behaviors by creating a budget, setting financial goals and saving money, financial lessons that will last well into adulthood. So, let's all practice good financial literacy, not just this month but every month.  
(There are many websites about financial literacy but I've included just a few below that might be helpful for parents.)

Jessica Roshak of Eugene is an Oregon Connections Academy High School social studies teacher. She can be reached through or (800) 382-6010.

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